The recovery in Britain's job market is coming from businesses replacing
employees, rather than creating new jobs, according to the chief executive
of recruitment company Hays.

Alistair Cox, head of the business which specialises in white-collar staffing, said: "I would consider the growth in the UK at the moment in the private sector to be largely job churn-related as opposed to new job creation."

Hays

While bigger corporates were starting to create more jobs, small and medium-sized enterprises were confident enough to replace leavers, but not yet creating significant numbers of jobs.

"As confidence creeps back into both candidates and clients, hopefully that's the next trend we'll see," Mr Cox said.

His comments came as Hays reported a slump in full-year pre-tax profits to £29.7m from £151m the previous year, but said the outlook across 90pc of Hays' markets was continuing to improve. "At the half year, we turned the corner and returned the business back to growth for the first time in two and a half years. Now we're in investment mode, growing our headcount and taking advantage of the market recovery," Mr Cox said.

Growth in the Asia-Pacific region helped counter the fall-off in recruitment in other markets and Mr Cox said that countries outside of the UK now contributed 60pc to Hays' fees - a figure which he expected to rise further.

Hays said on Thursday it plans to open new offices in Mexico and New Jersey in the US during the next year.

"Within the mix, Asia Pacific continues to lead the growth, with Continental Europe also showing some resilience," said analysts at Panmure Gordon. "The UK and Ireland continues to be the laggard in terms of recovery, although demand did remain sequentially stable during the second half."

The company proposed a final dividend of 3.95p, payable on November 19, making a maintained 5.8p for the year.